Please Help: Provident fund
Posted Date : 05-Oct-2011 , 04:51:13 pm | Posted By: Ashish Sanghi
Category :
Audit | Answers :
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Q1)Is Basic slary covers leave encashment?
Q2) If basic is Rs. 40,000 and 12% of Rs. 40,000 employee's contribution is deducted then 12%(40,000- 6,500) is a voluntary contribution? |
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Answers:
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 Answer by: Ashish Karundia |
| Dear Ashish,
Please clarify your 1st Question. Further, in respect of your 2nd question, it may be noted that that the total amount of PF contributed will be treated as voluntary contribution (i.e. 12% of 40,000) because PF contribution is mandatory only for people having basic salary upto Rs. 6,500.
Hope the above suffice.
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| Answer by: PRIYANKA |
| Basic salary does not include leave encashment paid. PF needs to be deducted only on employees salary drawing basic salary of Rs 6500/- per month. PF can be deducted from employees salary drawing basic salary of more than 6500/- but than its voluntary, as it is not required as per the act.Even If salary is more than Rs 6500/- PF needs to be deducted Only on 6500/- of basic salary. But in present case the whole amount comes under voluntary contribution, as It was not required as per the act.
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